Pool Re collaborates with Home Office and UK National Counter-Terrorism Policing on new initiative to make businesses more resilient to terrorism
Pool Re, Britain’s leading terrorism reinsurer, has invested in a joint project with the UK National Counter-Terrorism Police HQ and the Home Office’s Joint Security & Resilience Centre, helping businesses to more proactively protect against the risk of terrorism.
In a ground-breaking collaboration between the insurance industry, the UK’s counter-terrorism infrastructure and the government, Pool Re’s investment will fund a new interactive information sharing platform where firms and local authorities can:
- Improve risk awareness and risk mitigation against the persistent threat of terrorism;
- Access credible insights on risk mitigation and counter-terrorism best practice;
- Receive prompt messaging and authoritative advice in the event of a terrorist attack about essential actions – for example, whether they should go into lockdown and when might be safe to restart business operations;
- Develop their own counter-terrorism capacity through accredited online training for personnel;
- Be part of a well-resourced community of counter-terrorist police and other experts, as well as other businesses committed to improving their resilience.
Pool Re Chairman Geoff Riddell said: “As recognised in the Government’s CONTEST strategy, Pool Re and the insurance industry are uniquely placed to shape resilient behaviour, protect the UK’s economic infrastructure, and enhance national security interests by scaling the UK’s ability to tackle terrorism. We take this responsibility very seriously, and as such are delighted to be collaborating with the Home Office and Counter Terrorism Policing to deliver this critical initiative. The Platform will meet a longstanding need from the private sector for more credible, quality and timely information to be used in their protective security and resilience planning”.
The information sharing platform was announced this morning at the Home Office’s Security and Policing Conference in Farnborough, Hampshire. The platform will be developed and operated by counter-terrorism police and is a central part of the strategy to strengthen collaboration and information exchange between government, police and business. The platform, aimed at helping improve business continuity and resilience in the event of a terrorist attack, will provide information on the terrorism threat which ordinarily would be classified or costly for many businesses to access. Representing an important channel for businesses who may lack the time, resources and expertise to understand the terrorist threat, this will be a critical tool.
Commenting on the collaboration, Minister of State for Security, Ben Wallace MP, said: “This project is one of the first of its kind – a collaboration between the police, the insurance sector, and the Government that will help to keep the country safe and secure. If we are to properly respond to the terrorist threat, we need to ensure everyone plays their part. That is why partnerships like this one are so vital and I thank Pool Re for their leadership.”
The national policing lead for protective security, Deputy Assistant Commissioner Lucy D’Orsi, added: “Since the tragic events of 2017, Counter Terrorism Policing has been working alongside government and the private sector to strengthen our defences against terrorism through greater collaboration and information sharing. That is why this ground-breaking new platform is so important, as it will allow businesses to access credible information 24/7, connect users to experts, provide accredited online training and send direct messages in the event of an attack – strengthening our frontline against the unprecedented threat. By supporting this initiative, Pool Re will improve the engagement, collaboration and sharing of information between the private sector, policing and the security services – resulting in a better assessment of emerging threats and helping us to work together to keep the UK safer.”
Pool Re’s investment of £10 million in the information sharing platform is the latest in a series of ambitious initiatives in the last 12 months that will help insurers and their customers better understand the evolving terrorist peril. The innovations also include the closure of gaps in insurance cover and extensions to Pool Re’s financial reserves which protect the UK economy from terrorism. The most significant Pool Re initiatives of the last year include:
- Extension of cover to include losses from terrorism caused by cyber means;
- Inclusion of business interruption in Pool Re cover, even for premises which are not damaged;
- The first catastrophe bond in the world to cover terrorism risk specifically;
- Continued stimulation of the private market by giving a £2.3 billion terrorism retrocession placement, which constitutes the largest terrorism risk placement ever.
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Photograph: attached to this press release is an image taken at the Home Office’s Security and Policing Conference in Farnborough, Hampshire, where the announcement was made this morning. The image shows (left to right):
- Lucy D’Orsi (Deputy Assistant Commissioner, Met Police, and national policing lead for protective security)
- Ben Wallace MP (Security Minister)
- Julian Enoizi (Chief Executive, Pool Re)
Nick Ravenscroft, Haggie Partners
Tel: 020 7562 4444/07759 535277
Peter Rigby, Haggie Partners
Tel: 020 7562 4444
About Pool Re
Pool Re was formed in 1993 by the insurance industry in the wake of the IRA bombing campaign on the UK mainland. It is a mutual whose member insurers comprise insurers and Lloyd’s Syndicates which offer commercial property insurance in Great Britain. Ceding their terrorism risk to Pool Re affords member customers a guarantee ensuring that they can provide cover for losses resulting from acts of terrorism, regardless of the scale of the claims.
Pool Re is recognised as a leading example of public/private partnership. It is owned by its Members but is underpinned by an HM Treasury commitment to support the company if ever it has insufficient funds to pay a legitimate claim. In return for that commitment, Pool Re pays a premium to Government and in addition, were it ever to use this support, it would repay the money over time from future premium receipts.
However, in the event of a loss resulting from an act of terrorism, each member cedant must first pay losses up to a threshold which is determined individually for that insurer. When losses exceed that threshold, the insurer can claim upon Pool Re’s reserves, which now stand at approximately £6.4 billion. These reserves have been accumulated by Pool Re since its inception. It is only in the event that these reserves and the company’s commercial reinsurance are exhausted, that Pool Re would require Government support.
Pool Re has evolved during the course of its history into a comprehensive ecosystem for reinsuring terrorism risk. Since April 2018, Pool Re has extended its cover to include material damage and direct business interruption caused by acts of terrorism using a cyber trigger. In addition on 12 February 2019 Royal Assent was announced to an amendment of the 1993 Reinsurance (Acts of Terrorism) Act to enable Pool Re to extend its cover to include non-damage business interruption losses resulting from acts of terrorism, thereby closing a protection gap that had emerged. In both cases, Pool Re is the first of the global terrorism pools to overtly extend its cover to include these threats, demonstrating the strength of public/private partnership in disaster risk financing.
No longer a simple mechanism for providing compensation, today Pool Re partners with various academic institutions in order to better understand the threat of terrorism. In conjunction with its sponsoring of a Professor of Terrorism Risk Mitigation at Cranfield University, Pool Re’s research and analytics department, Pool Re Solutions, provides threat analysis and modelling to insurers so as to stimulate the commercial insurance market by enabling it to understand, assess and ultimately price terrorism risk with a view to assuming more of that risk over time. One success of this approach was the repatriation of Contingency risk to the commercial market in January 2019.
Pool Re also works to increase economic resilience by, for example, providing incentives in the form of premium reductions for end customers who implement protective security measures accredited by the government. Moreover, and in line with the Governments counter terrorism strategy CONTEST, Pool Re has an ambition for a more integrated relationship with the public sector, both to better protect our economic infrastructure and to scale our ability to tackle terrorism. The Home Office is therefore working with the UK insurance sector via Pool Re in order to develop mutually beneficial risk mitigation projects that will reduce the risk of terrorist attacks.
Pool Re is a founding member of the International Forum of Terrorism Risk (Re)Insurance Pools (IFTRIP). Established in 2016, IFTRIP is aimed at fostering closer ties and allowing for greater collaboration between the world’s terrorism disaster risk financing mechanisms. IFTRIP is comprised of national terrorism risk entities from thirteen countries.
Over its 25-year history, Pool Re has dealt with 16 separate certified terrorism claims totalling £635m (equivalent to £1.35bn when adjusted for inflation). Since March 2015, Pool Re’s financial resilience has been augmented by a commercial reinsurance placement, now the largest in the world at £2.3bn. This re-engages the global market in aggregated UK terrorism risk for the first time since 1993, and additionally provides protection to Pool Re’s assets whilst distancing the UK taxpayer further from loss. In Q1 2019, contingency cover from terrorist attacks was returned to the commercial market consistent with Pool Re’s strategy of ending market failure. Consistent with this strategy, in March 2019 Pool Re issued the first cat bond where the risk transferred was standalone terrorism risk using the UK’s recently passed ILS legislation. It was also the first cat bond to use a Computational Fluid Dynamics model as the basis for its risk analysis, illustrating the value of Pool Re Solutions.